VHM agrees to Mitsui supply term sheet

• VHM agreed to a non-binding term sheet with Mitsui & Co to supply heavy mineral concentrate from its Goschen Project.
• The agreement covers up to 50% of the project's output, or up to 65,000 tonnes per annum, for an initial three-year term.
• The deal advances VHM's commercial off-take strategy as both companies progress towards a binding supply contract.

VHM (ASX:VHM) agreed to a non-binding term sheet with Mitsui & Co. to supply up to 65,000 tonnes per annum of heavy mineral concentrate from its Goschen Project in Victoria.

The proposed agreement builds on an earlier letter of interest and covers 50% of the project's planned production for an initial three-year period, with an option to extend for three additional years.

VHM CEO Andrew King said, "The execution of a detailed non-binding term sheet with Mitsui is a significant milestone for VHM and provides validation of the scale and strategic importance of the Goschen Project.”

The company stated that the detailed term sheet establishes key commercial terms while both parties work to progress a binding off-take agreement.

Pricing under the arrangement will follow a market-linked formula tied to prevailing zircon and titanium dioxide prices on a free-on-board Australian port basis.

Following the announcement, the VHM share price was unchanged at $0.24.

The agreement covers material sourced from VHM's wholly owned Goschen Rare Earths and Mineral Sands Project located in Victoria.

VHM stated that it continues discussions with Mitsui regarding potential volume increases to secure future commitments for up to 100% of the project's production.